Kevin Lane is one of the founding partners of Fusion Analytics, and is the firm’s director of Quantitative Research. He is the main architect for developing their proprietary stock selection models and trading algorithms. Prior to joining Fusion Analytics, Mr. Lane enjoyed success as the Chief Market Strategist for several sell side institutional brokerage firms. In those capacities he oversaw the firms’ research departments. He produced a broad range of widely followed institutional research publications ranging from industry specific notes to quantitative/fundamental reports on individual stocks. His buy side clientele consisted of many of the nations top money managers and hedge fund managers. Mr. Lane is a member of the Market Technicians Association.
As seen in the S&P 500 chart above, the index ran into resistance at the 1,020 level (red line) but this is still well above its recent range breakout spot near the 950/930 area (green dotted line). So at this point while prices are drifting keeping things in perspective we are still in the middle of a higher level trader range (930/950 to 1,020) after spending the earlier part of the summer locked in the 850 to 950/930 range.
The recent weakness is a combination of the late summer doldrums and a mean reversion of the S&P 500’s 15.20 % run up (measured from its’ recent high from its low on 7/10). Anecdotal sentiment has investors still doubting the rally, under invested and extremely cautious. While this kind of sentiment exists it is hard to expect anything more than a minor pullback (5% – 7 %).
While late summer and fall seasonality trends typically line up in the negative return camp it appears that so many investors are relying on it as gospel that maybe it won’t happen this year.
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